- Despite the 2022 crypto winter, new investors continue to invest in Indonesia’s crypto market.
- Meanwhile, Indonesia tightened its crypto regulatory policies last October following events in the crypto space since January 2022.
Indonesian authorities are reforming its financial sector regulations which will now include crypto regulations. Consequently, the nation’s financial services authority (FSA) will start overseeing crypto assets trading. Before this financial regulation reform, the commodity futures trading regulatory agency (Bappebti) performed oversight functions over crypto trading in Indonesia.
However, implementing the reform means that FSA will now take over the responsibilities of Bappebti. In an acknowledgment of the changes, Bappebti chief Didid Noordiatmoko stated that the FSA would only oversee crypto asset trading for the next 24 months. He added that Bappebti is analyzing 151 assets and ten local coins to determine whether they should be traded on crypto exchanges.
More than 383 digital assets and ten local coins are available for trading across Indonesian exchanges. Indonesia’s crypto ecosystem keeps soaring despite crypto winter.
New investors in Indonesia’s crypto market
Various on-chain metrics show that there were 16 million crypto investors in Indonesia’s crypto market between January and November 2022. The figure represents an 11.2 million rise from 2021 figures. However, crypto trading volume declined in 2022 compared to 2021.
In 2021, crypto trading volume in Indonesia was 859 trillion Rupiahs compared to 300 trillion Rupiahs in 2022. Furthermore, there has been a rapid surge in the number of crypto holders and exchanges in Indonesia over the last two years. For instance, users on Indodax (one of Indonesia’s top crypto exchanges) reached 5 million last year, a rise of over 100 percent from 2021 data.
Similarly, there was an eight-times increase in users on Tokocrypto (another popular crypto exchange in Indonesia) in the last two years, per data from the exchange’s website. However, the fast growth in Tokocrypto’s user base may have been due to the country’s rapid surge in mobile app usage. Indonesians have embraced crypto assets despite industry analysts’ concerns regarding the supremacy between the country’s legal tender (Rupiah) and digital assets.
Nevertheless, Indonesia’s authorities approved the bill recognizing digital assets as financial securities.
Indonesia’s strict crypto policies
Meanwhile, Indonesia tightened its crypto regulatory policies last October following events in the crypto space since January 2022. First, the government banned license issuance for crypto exchanges indefinitely. Indonesia’s started its reform on regulations for its finance sector following tightened crypto regulations by southeast Asia.
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A Reuters report in September 2022 stated that the nation’s trade ministry intends to modify crypto exchange rules. One such modification would be that at least 65 percent of any Indonesian crypto exchange’s commissioners and board of directors must be citizens. However, Noordiatmoko commented on the report saying that introducing such a rule would prevent top-level and experienced management of such crypto firms, especially during inevitable crisis periods.
Nevertheless, Noordiatmoko’s comments won’t deter Indonesian authorities from going ahead with their plan. Following a parliamentary hearing three months ago, Jerry Sambuaga, the deputy trade minister, told reporters that the law would still take effect this year.